Purchases of new homes in the U.S. probably fell in October, deepening the real estate slump that threatens to stall economic growth, economists said before reports today.
Sales fell 2.6 percent to an annual pace of 750,000, according to the median forecast in a Bloomberg News survey. A separate report may show the economy expanded at an annual rate of 4.9 percent in the third quarter, the most in four years.
The collapse in subprime lending and turmoil in financial markets are projected to extend the housing recession well into 2008. Some economists now forecast the world’s biggest economy will grow this quarter at less than a fifth the previous three months’ pace, prompting the Federal Reserve to lower rates.
“The expansion is slowing,” said Gary Bigg, an economist at Bank of America Corp. in New York. “Prospects for future home sales remain dim.”
The Commerce Department is scheduled to issue the home sales report in Washington at 10 a.m. The 71 estimates in the Bloomberg survey ranged from 705,000 to 785,000. Purchases reached an 11-year low of 735,000 in August.